1,000 Days of Milei

One thousand days is a long time in politics.

When I wrote about Javier Milei’s first 100 days in office, Argentina was embarking on yet another attempt to break free from a cycle that had become painfully familiar: fiscal excess, monetary financing, inflation, capital controls and, eventually, crisis. Markets were optimistic, but they had been optimistic before. Argentina has a habit of disappointing even its most enthusiastic supporters.

At the time, Milei inherited an economy in severe distress alongside a reform agenda that many viewed as politically impossible to implement. Today, as Argentina approaches the 1,000-day mark of his presidency, investors can point to something far more tangible: results.

That does not mean the story has been flawless. Economic recovery has come with significant social costs, political controversy remains a constant feature of Milei’s presidency, and accusations surrounding the LIBRA cryptocurrency scandal have created an unwelcome distraction. Yet, taken as a whole, the last 1,000 days arguably represent one of the most successful periods of macroeconomic stabilisation Argentina has experienced in decades.

The road from crisis to reform

When Milei took office in December 2023, Argentina’s economy was under significant strain.

Argentina’s inflation surge into 2024 was largely the consequence of years of fiscal deficits financed by money printing, chronic peso depreciation, capital controls and repeated losses of confidence in economic policy. Global post-pandemic inflation and commodity shocks added to the pressure, but the underlying problem was domestic: too many pesos chasing too few goods in an economy where households had little faith in the currency.

By the time Milei took office, annual inflation had reached 211%, later peaking at almost 290%, while monthly inflation exceeded 25%.

Source: M&G, Bloomberg. 30 June 2026

Since then, inflation has fallen to around 33.5% year-on-year, driven primarily by an aggressive fiscal adjustment, the elimination of monetary financing of government spending, exchange-rate liberalisation and a broader restoration of policy discipline. While favourable factors such as stronger exports, rising energy production and statistical base effects have also helped, the scale of the disinflation suggests that most of the improvement can be attributed to Milei’s economic programme.

Argentina’s experience provides a powerful example that when inflation stems from deep structural fiscal and monetary imbalances, politically painful reform can sometimes prove more effective than gradual adjustment. The diagnosis was hardly controversial. Argentina had spent years attempting to solve fiscal problems through increasingly creative monetary solutions. The outcome was predictable.

Milei rejected gradualism entirely. Instead, he pursued one of the most aggressive fiscal consolidation programmes seen in any major economy in recent history. Subsidies were cut, public spending reduced, government departments streamlined and fiscal balance elevated to a near-sacred policy objective.

The approach was described by supporters as shock therapy and by critics as economic extremism. The reality, however, lies somewhere in between.

Shock therapy is rarely popular because it forces adjustment immediately rather than deferring it into the future. It creates visible short-term pain in exchange for the possibility of long-term gain. However, where fiscal and monetary dysfunction have become deeply embedded, gradual approaches can make the road to recovery longer and more uncertain.

Markets have rewarded policy credibility

Perhaps the clearest indication of progress can be found in financial markets.

Back in March 2024, Argentine sovereign spreads remained firmly within distressed territory. Investors were willing to believe the reform story, but they wanted evidence that the government could deliver. And, looking at economic fundamentals, they have.

Source: M&G, IMF. 30 June 2026

That evidence has increasingly emerged, with all three major rating agencies upgrading Argentina’s sovereign credit profile during Milei’s presidency. Fitch upgraded Argentina to B- in May 2026, citing improved fiscal and external balances, progress on reforms and stronger prospects for reserve accumulation. S&P subsequently upgraded the country to B-, highlighting improved access to financing and reduced macroeconomic imbalances. Moody’s has similarly moved Argentina out of the highly distressed category, pointing to falling default risk and improving economic fundamentals.

Sovereign ratings influence the pool of investors able to allocate capital. Argentina remains firmly below investment grade, but moving away from the distressed end of the spectrum expands the universe of potential buyers and gradually lowers financing costs.

Spreads remain elevated relative to most emerging markets, reflecting Argentina’s history and lingering vulnerabilities. The more notable development, however, is how much this premium has narrowed. With sovereign spreads now hovering around 100bps wider than the broader single-B universe, markets appear to be assigning a significantly higher probability to continued normalisation than was the case just a few years ago.

Source: M&G, Bloomberg, JP Morgan. 30 June 2026

That represents a remarkable shift from where the country stood less than three years ago.

Investment is beginning to follow

One of Milei’s most important achievements may ultimately be the restoration of predictability.

Countries rarely grow sustainably without access to capital. Investors do not require perfection, but they do require a degree of confidence that economic policy will remain broadly consistent. For many years, Argentina offered neither.

The combination of fiscal surpluses, declining inflation and exchange-rate liberalisation has helped strengthen relationships with multilateral lenders and private investors alike. While international market access is still developing, the country’s financing options have broadened considerably compared with the near isolation that characterised previous years.

The IMF relationship has also evolved. Historically, Argentina and the IMF often appeared trapped in a cycle of support packages, missed targets and renewed crises. This period feels different. Rather than financing an unreformed economic model, the IMF has effectively become a partner in a broader stabilisation programme. Whether one agrees with every policy decision or not, this increasingly resembles a reform story rather than another rescue operation.

Economic stabilisation matters because it creates the conditions for investment. Argentina’s natural advantages have never been in doubt. The country possesses world-class agricultural exports, significant mining potential and one of the most important unconventional energy resources anywhere in the world through Vaca Muerta. The challenge has always been converting potential into realised investment.

Encouragingly, foreign direct investment has begun moving in the right direction. Energy and mining projects have attracted growing international interest, supported by regulatory reforms and greater macroeconomic stability. Rating agencies have specifically highlighted improving investment pipelines and stronger prospects for FDI inflows as part of the rationale behind recent upgrades.

This highlights an important point. Fiscal discipline alone does not create growth. Rather, it creates an environment in which private capital becomes willing to invest.

A presidency without blemishes?

None of this should be interpreted as an argument that Milei’s government has been beyond criticism.

The economic adjustment has imposed genuine hardship on many Argentinians. Real incomes initially fell sharply; poverty increased during the adjustment phase and social tensions remain elevated. Even supporters would acknowledge that the benefits have not been distributed evenly.

More recently, controversies surrounding Milei’s association with the LIBRA cryptocurrency project have raised questions around judgement and governance. While the economic reform programme and the scandal are separate issues, governance matters. Investors can overlook many things, but sustained improvements in institutional credibility require high standards of political conduct.

It would therefore be wrong to suggest that the last 1,000 days have been an unqualified success. Public support has proven more resilient than many expected, but the politics remain polarising and the social costs remain real.

Argentina’s history also serves as a reminder that credibility can be lost much faster than it is earned.

Breaking the cycle

Ultimately, the significance of Milei’s first 1,000 days extends beyond lower inflation, tighter fiscal policy or stronger sovereign credit ratings.

Argentina has delivered periods of improvement before, only for policy discipline to fade and old vulnerabilities to re-emerge. The country’s economic history is littered with false dawns. Understandably, many investors remain cautious about declaring victory too early.

The real test will be whether today’s gains prove durable.

What has changed, however, is that investors are no longer debating whether stabilisation is possible. Instead, they are increasingly debating how far the recovery can go. That is a very different conversation from the one that existed in late 2023.

Argentina may not yet be fully repaired. Significant economic, political and social challenges remain. However, after decades of recurring crises, policy reversals and disappointed expectations, the country appears to be moving on to a more sustainable path than many believed possible just a few years ago.

For a country that has spent much of its modern history disappointing even its most optimistic supporters, that alone represents meaningful progress.